Late last winter, John Marzo and Melisa Vong decided to each test the cryptocurrency waters with a small investment. They both chose ethereum; Ms. Vong also added bitcoin. The price of ethereum in early March, 2017: between US$18 and $25.

The young Toronto couple isn't purchasing coins on credit, and they're not being bankrolled by family. They belong to a new class of investor: Young, self-taught and armed with online research, they're utilizing their position as digital natives to capitalize on a burgeoning industry that the general public is largely still struggling to understand.

"I've always had this mentality [that] you have to work hard to get ahead, but you also need to work smarter," says Ms. Vong, co-founder of Namskara, a skincare company that uses natural and sustainable ingredients. "Because we grew up in the technology age and have become accustomed to using the internet as a tool, it only makes sense to leverage it. If you can make money off the internet, then why not take advantage of it?"

"I feel like now you can get real control over your financial situation with just an internet connection," says Mr. Marzo, an industrial engineering student at Ryerson University. He has since added to his initial investment and has seen growth of about 20,000 per cent since he first got started last year.

"Our parents grew up with encyclopedias. We grew up with Google. People need to leverage the tools that they have."

For Mr. Marzo and Ms. Vong, the foray into cryptocurrency was preceded by a couple years of trading other assets. They started with Forex, trading in the summer of 2015, when Ms. Vong was between her third and fourth years at Wilfrid Laurier University in Waterloo, Ont. With a group of friends, they started what Ms. Vong calls a trading house; together, using online resources, the group learned how to read and analyze charts, make trades and maximize profit-earning potential. When the couple's interest in cryptocurrency was sparked, they spent months researching blockchain technology, mainstream and alternative coins, and technical analysis, before buying in.

Michael King, co-director of the Scotiabank Digital Banking Lab at the Ivey Business School in London, Ont., says that cryptocurrency comprises one-eighth of the lab's research, and about 95 per cent of the questions they field.

"[The interest of] students is really high. Students are fascinated by the new technology," Mr. King says. "It provides lots of opportunity for younger people who are smart and technologically savvy. They see it as a way to overturn the traditional financial system to their benefit."

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Although the availability of credible data is still slim, studies suggest that the cryptocurrency investor base skews millennial. In an online survey of more than 2,000 U.S. adults in October, 2017, conducted by Harris Poll on behalf of Blockchain Capital, a venture-capital firm investing in blockchain-enabled technologies, 17 per cent of respondents between the ages of 18 and 34 reported being very familiar, owning or having owned bitcoin, compared with only 4 per cent of respondents between the ages of 45 and 54. That, according to Mr. King, is largely due to generational differences in risk aversion.

"Many investors who have been in financial markets for years have experienced business cycles that have been associated with booms or busts in asset prices and, in some cases, spectacular collapses," Mr. King says. "One of the shortcomings for millennial investors is that they may not have lived through those episodes, and so their risk aversion is quite different from someone who's already lost money in one of these previous booms and busts."

Personal experience aside, the skepticism surrounding cryptocurrency is valid. With a lack of regulation and security, the prevalence of hoaxes and scams, and the environmental toll, there's good reason to approach cryptocurrency with dubiousness. And there are the wild fluctuations in price, like the plunge of bitcoin in mid-January and again in early February. On Feb. 5, the total value of the overall cryptocurrency market plummeted to a more than 60-day low, according to data from CoinDesk.

Tim Chau, 25, agrees that caution is warranted. Though the value of his own investments is up between 30 and 40 per cent (prior to the recent price decline, they had, at points, doubled in value), the Toronto accountant says, "There's merit to what skeptics are saying. There's no doubt that trading right now is based heavily on emotions."

As a result, Mr. Chau has learned to do his homework. "I like to listen to all sides, and make my decisions accordingly. I do think there is inherent value to the idea of decentralized currency that can be traded instantaneously with low fees," he says. "I realize the potential of bitcoin, but I do also see its many flaws."

Mr. Chau's friend, Jon Ho, agrees. The 25-year-old is a senior growth marketer – a digital-marketing role focused on user acquisition and retention – at Uken Games, a Toronto-based social-game studio. He has a diversified portfolio of traditional investments, as well as "big three" cryptocurrencies such as bitcoin and ethereum, and cardano, one of the lesser-known coins commonly referred to as an "alt-coin." His strategy: striking a balance between enthusiasm and wariness.

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"I'm obviously hoping for financial freedom," Mr. Ho says. "But playing it smart, rebalancing your investments, cashing out when you think something is going to drop and buying back in when things are low, that's the way to reach that point. It's not simply throwing money at it and hoping it will rise."

The gains seen by Mr. Ho, Mr. Chau, Mr. Marzo and Ms. Vong are achieved through well-timed moves; buying a cryptocurrency during a high because of hype is a no-no, as is selling at a low because of the hysteria that ensues during a dip. While the four investors say their friends have also fared well during dips and climbs, the same can't be said for others. A quick perusal of online-forum Reddit reveals investors venting about losses of thousands of dollars, and expressing fears that the market won't recover. "It's all about timing, and the past few weeks have not been kind to crypto investors," Mr. Chau says.

While technical analysis is essential, so is an ability to weather those periods of media hype and hysteria, while maintaining an awareness of the emotional factors that can affect prices.

"No one is saying that you can't speculate on these currencies and perhaps make a gain, but you do have to recognize that you're speculating. You're taking a gamble and you have to be willing to lose everything," Mr. King says.

Mr. Marzo went in knowing the risk. Of his first ethereum purchase, he says, "My logic was 'worst-case scenario, I still have student loans, like everyone else. Or best-case scenario, this pays off and I can buy a yacht.'" The gamble has, thus far, paid off. Diligently observing the market and voraciously consuming research has helped Mr. Marzo, at only 26, put himself in a financial situation he hadn't thought possible.

"Ninety-nine per cent of the money I have to my name has been created from this crypto space," he says. "I'm not at the yacht yet. But I'm also not worried about student loans."

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Som Seif, CEO of Purpose Investments shares his thoughts on investing in 2018.

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